Word of mouth has turned positive in recent weeks, with many dealers reporting an increased volume of traffic in their stores. Depreciation in the retail and wholesale markets generally relaxed in the fourth quarter and early 2017, and pricing and volume at auctions in February suggested a stabilizing market.

Specific February auction performance of our benchmark model was as follows:

MY2013: $34,091 average; $7,844 (or 29.9%) higher than January

MY2012: $23,605 average; $4,290 (or 15.4%) lower than January

MY2011: $26,234 average; $1,366 (or 5.5%) higher than January

The benchmark model we track saw lower volume in February, which explains the monthly fluctuations. 2013 model year trucks saw a notably lower volume compared to January, and pricing increased as a result. Looking at multi-month trends, three to five year-old versions of this model actually gained 6.2% in value on average. Discounting the volume-related increase in pricing on 2013’s, selling prices do seem to support word of mouth that the market is leveling out, and demand is picking up. Keep in mind, though, there is a substantial potential returning supply of trucks in the upcoming 2-3 years, which will keep a cap on upward pressure in pricing.

We continue to be cautiously optimistic about market conditions in 2017, and our depreciation forecast is scaled back from 2016. We forecast monthly depreciation in the high 1% to low 2% range, down from high 2% in 2016. See graph below for detail.